China Builds $390 Million Data Centre Powered Entirely by Domestic AI Chips

On September 17, 2025, Reuters reported that China Unicom has completed a $390 million data centre in Xining, Qinghai, which uses only domestically manufactured AI chips.

The facility currently operates at about 3,579 petaflops computing power, using nearly 23,000 AI chips. Most chips come from Alibaba’s T-Head unit, along with contributions from Biren Tech, Zhonghao Xinying, and others. Plans are underway to scale up to 20,000 petaflops.

This development is in line with China's strategic aim to reduce dependency on foreign tech in critical sectors, particularly as export controls and geopolitical pressures around semiconductors intensify. Additionally, Beijing is investigating Nvidia for alleged anti-monopoly violations, part of the broader state drive to bolster domestic semiconductor capabilities.

Key Highlights

• New $390 million data centre in Xining, Qinghai, runs fully on domestic AI chips.

• Currently 3,579 petaflops of compute; planned expansion to 20,000 petaflops.

• Chips primarily from China’s own manufacturers: Alibaba’s T-Head, Biren Tech, Zhonghao Xinying etc.

• Part of China’s push for chip self-sufficiency, against backdrop of U.S. export restrictions and trade tensions.

Why This Matters

1. Tech sovereignty: Running a center entirely on domestic chips signals China is making serious progress toward independence in AI infrastructure.

2. Strategic scale: The compute scale (petaflops) and planned growth show commitment beyond small pilot projects.

3. Global chip market impact: This strengthens competition for foreign chipmakers and pressures supply chain resilience.

4. Policy & regulation: Reflects how government investment and regulation are shaping where and how AI infrastructure is built and by whom.

Source
Reuters – Full Article